Editor’s Note: In Making Sen$e’s report on “the artisan economy” Tuesday evening on the NewsHour, Paul Solman speaks with two exterminators and a dementia coach. Not what you typically think of as “artisans”? Well, how about operators of a fresh fruit Popsicle company or a line of handmade dog leashes, both crafted in a repurposed Brooklyn factory? Any of those jobs can be artisan says Larry Katz, the Harvard professor who’s coined the term “artisan economy.” What makes them artisan is that they’re not standardized occupations; they involve what he calls “personal flair” in each stage of the job.

But this movement is about a lot more than hipsters bucking a traditional career path. Katz believes the artisan economy can help shore up the American middle class by creating new jobs to replace those mass production and middle management jobs lost to outsourcing or new technology. And he thinks that a firm grounding in the multidisciplinary liberal arts is the best preparation – better even than a business degree – to taking advantage of the artisan economy that he hopes will be a path to upward mobility for the average American. Watch Paul’s report, and read his extended conversation with Katz, edited and condensed for clarity, below.

108600108602108602Could Brooklyn hipsters help save the middle class?Frozen ginger slushies, tea-based pro-biotic drinks, a bed bug-killing steam machine -- these are just a few of the locally-grown products coming out of Brooklyn’s burgeoning artisan economy. But as popular as these start-ups may be, are they generating more jobs? Economics correspondent Paul Solman takes a look at some of these businesses and the challenges of carving out one’s own career.2014-07-15 18:00:00disabled23652896278xHun6klxvAfalse

Historically, an artisan is somebody who did the entire work largely by themselves — conceive a project, put it together, make it. Think about Paul Revere as a silversmith in Colonial America.

The potential is almost anywhere — it’s typically not an organizational job where you’re just moving up a ladder, but in principle, you could be an artisan as a wait person or as a baker.

What’s the basic problem that the artisan economy is trying to solve?

The basic problem is the decline of what has been traditional middle class jobs, the hollowing out of the middle of our economy and trying to find a new way to provide upward mobility for the typical American.

Artisans were very important in the colonial economy. But in some sense, mass production in the large industrial economy drove out a lot of artisans. The individual blacksmiths and gunsmiths were replaced with large production processes that made standardized goods much cheaper.

And that’s happening now, every day?

It’s happening every day. In the 19th century, when high-earning artisans were displaced, two groups benefited – the highly educated workers who became the managers and the engineers who designed the technological processes that replaced the artisan. And then there were a lot of frontline workers, who were less skilled than the artisans, on the assembly line.

So a lot of the jobs that became the middle class jobs of the mid to late 20th century – mid-level managers and production workers, for example, are exactly what new information technology is very good at replacing. You don’t need as many middle managers if you can directly monitor with a computer what the frontline worker is doing; a robot can do the production process or it can be outsourced.

We’ve seen growth in jobs for people with abstract creative skills, like designing an auto teller or thinking of new ways to entice consumers to want to make more financial transactions. There used to be people who actually graded every mortgage; now it’s writing a program to grade the mortgage or interpreting how to market them.

“There’s a possibility of an economy emerging in which the ability of people to have their own personal style and flair will be much more valuable than just doing routine things.”

There’s the potentially hopeful scenario of, in some sense, being able to bring back the old mass production artisanal work with new technologies of today that allow a lot of customization and creativity in the same way that hand work did in the past.

So that could range from designing an app or being a carpenter who uses technology to customize a kitchen cabinet for the high-end abstract worker. If I’m a carpenter, if I can figure out what idiosyncratic items you would prefer and design them myself, I’m a much more valuable contractor in the same way that someone like Paul Revere could personalize what a silversmith did.

I could be a college graduate who goes out and thinks very seriously about using local produce or I could be someone with community college training and set up my own catering service or restaurant. That might not look like a traditional college job or a middle class job, but that can be very lucrative if I’m doing that in a creative way with flair in a way that a standard fast food restaurant isn’t.

So I think there’s a possibility of an economy emerging in which the ability of people to have their own personal style and flair will be much more valuable than just doing routine things. That’s the case at both high-level jobs, but also in being a home health aide in ways that are very valuable to your patients and that will earn you a higher income eventually. I think that’s potentially where there may be a new middle class.

We speak to a dementia coach in our Making Sen$e story on the NewsHour Tuesday who coaches families on how to deal with a relative with dementia. Is she part of the artisan economy?

Working with the elderly is a huge area. And this is where the growth of what I call the “artisan economy” is beneficial not just to the worker. In the worst case scenario, [working with the elderly] is a minimum wage job where people are effectively babysitting and not really learning, and the elderly are pretty much checked out and sedated in some cases. But it could be done in a way that brings dignity to the patient and their family – that’s a skill that requires some education, but a lot of experience would be much more valuable if we reimburse that in a way that took into account the skill of an artisanal dementia coach or home health aide. We should be doing that in Medicaid and Medicare. That’s the kind of middle class job that’s going to be extremely valuable going forward as opposed to a “McJob” where the person just does a routine.

“That’s the key: can you complement the new computer technology and use it to provide a better experience rather than just be someone who does a routine thing that anyone could replace you in doing?”

Computers are very good at an algorithm, but lots of people might do much better with another human being who has a little empathy.

Well there’s “Her,” the new movie where there’s a computer program that is extraordinarily empathic.

It is true that there are ways of programming and maybe 20, 30 years from now, computers will be telling physical therapists and contractors what to do, but we have a window where I suspect computers will be more tools to enhance your individual flexibility and flair rather than substitutes for you.

That’s the key: can you complement the new computer technology and use it to provide a better experience rather than just be someone who does a routine thing that anyone could replace you in doing? There’s enough human ingenuity out there and enough demand for new experiences that people will be able to take advantage.

But to get there, we need to rethink education – not just to produce people who can do well on standardized tests, but who can also work in collaborative ways with interpersonal skills.

We recently did a story on apprenticeships at BMW’s plant in Spartanburg, South Carolina. Are apprenticeships helping boost the middle class by teaching manufacturing workers how to be more efficient with new, more sophisticated machinery?

Traditional apprenticeship programs have been a valuable way for a small group of individuals, at least in the United States, to gain a set of skills that have been very valuable in the manufacturing sector. The U.S. could expand apprenticeships, but I think it’s unrealistic to believe that that expansion could make a very big dent in the unemployment problem or the skills gap or inequality because the types of jobs apprenticeships train for are exactly the types of things that are likely to be become more and more obsolete.

“ The types of jobs apprenticeships train for are exactly the types of things that are likely to be become more and more obsolete.”

Where I think there’s a future is less just the traditional apprenticeship and more what you might call “contextual learning,” which gives you a foundation of liberal arts that’s very flexible and combines that with learning a trade that’s valuable in an industry today, but not so narrow that if demand for that particular skill goes away, you’re left with nothing.

We have evidence of this, for example, in a way of doing high school known as Career Academy, which has been evaluated using a gold standard randomized control trial. It tries to provide a very rigorous high school education, but for part of the week, you go work with an employer to try to apply what you’re learning.

So you might work in a hospital part of the week while you’re learning biology and physiology and actually see what you’re doing in practice. The goal isn’t necessarily to make you a health technician — maybe you’ll end up being a physician, maybe you’ll end up being an investment banker who invests in pharmaceuticals stocks — but it’s to connect your knowledge to the real world.

A DIFFERENT VIEW

The study showed that that type of training, even eight years out, was improving earnings. Even if people weren’t doing the exact same thing that their internship was in, it was valuable; it got them excited about learning; they went further in school and they were much more flexible at moving across jobs over time. We’re seeing similar things with a set of programs known as sectoral employment programs.

There’s a very nice one known as Per Scholas, which operates in the Bronx and provides IT certification, often to people who have dropped out of community college or are from disadvantaged backgrounds. We’re seeing very strong effects several years out; they’re getting life skills, detailed technical knowledge, but also a broader set of skills.

The idea is you finish school with a very marketable current skill, but also with a broad set of knowledge and experiences that allows you to move beyond that. So you could go further in education or if that job disappears, you’re much better prepared; you also have a more positive view of retraining because you know you got turned on by knowledge.

So who do you imagine is going to be capable and interested in taking these jobs?

The hope is that our K-12 education system would generate people with a strong enough background that with some college training and their own ingenuity and interests, the vast majority of Americans would have the possibility of getting a job like this.

Not the ones who aren’t going to college?

Right, I think it’s still going to require some college in most cases — it doesn’t have to be a four-year college.

For anyone who finishes high school, who wants to go on and pick up both a good further education and a set of skills that are valuable in the labor market, this is a potential path. It’s not going be, “Today I just finished my two-year degree and all of a sudden I’m an artisan!” Bopping around through a number of jobs and figuring out your niche is going to be the more typical experience of a lot of American workers — not just entering one job and staying there throughout their lives.

Yes, we’ve been hearing about this, most notably since the Clinton administration, with how many jobs you can have in a lifetime. It’s still the case that about two-thirds of Americans still do not get four-year college degrees, right?

Yes, and this group has been struggling, and this [artisan idea] is just one possibility — it’s not by itself. There will still be a lot of routine, traditional jobs. A higher minimum wage and a more generous earned income tax credit are going to be necessary. Not everyone is going to succeed. If we want people to take risks and move into these types of jobs, we’ll need a reasonable social safety net — especially for health care access since you’re often not going to have it from a traditional employer. This is a part of trying to build a society with more broadly shared prosperity, but it’s not by itself sufficient.

We both encounter a lot of college kids; they’re worried about the future. But if they’re going to Harvard, they don’t really have anything to worry about, so is this broadly applicable to people who are getting four-year degrees even?

Yeah, to some of them. Over the last several decades, college-educated workers have done much better than everyone else in the economy, but even among college-educated workers, there’s been a huge growth of inequality. So kids graduating from Harvard and Williams in computer science, economics, physics and some humanities are doing pretty well in the job market. In today’s weak economy, kids graduating from good state universities are doing pretty well too, but many college graduates today are facing a very tough market. These are the ones who would have gone into being traditional middle managers.

“ I actually think it may be that a really strong liberal arts education is going to be more valuable in the future.”

So what you see is that, in some sense, the bottom half of jobs for college graduates has been just as affected by this as the top half of jobs for non-college graduates. … And yet someone who is a college graduate who ends up being a pastry chef looks like they’re in a non-college job, but that can be done in a way that’s very valuable and lucrative.

I know a pair of brothers, both of whom got college degrees, who are now going into their father’s plumbing business. Are they part of what you’re talking about?

In general, yes, they would be able to communicate with clients in ways that someone who only had experience in the plumbing industry wouldn’t. They may bring an outside perspective and a creative engineering of problem solving that could be quite valuable.

You and me, if we were younger, what would we do, do you think? You’ve got a tenured position at Harvard, so you have nothing to worry about, and I’ve been playing this one niche for a very long.

THE LIBERAL ARTS

I think any young person is going to want a strong liberal arts education to give you the basis to move in a lot of different directions. I actually think it may be that a really strong liberal arts education is going to be more valuable in the future as opposed to a very specific thing by itself. A traditional business program may be less valuable in the future than someone who may have been a humanities major but learned a bunch of science and analytics as well. It’s going to be your ability to deal with what can’t be turned into an algorithm; how well do you deal with unstructured problems and how well do you deal with new situations; that’s really key.

But you hear people more and more now saying to college graduates, “Don’t follow your bliss, don’t do what you love because that’s impractical.”

That could turn out to be impractical, but the way to get around that is to combine contextual learning with picking up a marketable set of skills. ideally when you’re young is the time to try to do something. If you look at what many Nobel prize-winners in economics have done, there’s an optimal strategy of doing risky things early and searching around to find a sort of niche. You want to have some insurance that you can fall back on, but you want to try it out at first.

So do you react negatively when you hear people now increasingly say, “Don’t do what you love because that’s impractical” when students graduate college, or high school even?

It’s true that most creative endeavors first fail, but there are many cases where pursuing that might then lead to other opportunities. You don’t want to just do something because it looks like today there’s a safe job in it. It’s the same way when I advise people how to do a dissertation; you don’t get inspired if you just do what someone says is a safe topic. You want to do something that you wake up every morning and feel passionate about — and that doesn’t guarantee that there’ll be a market for it — but in many cases, it’s giving you a good shot.

And what is the dark scenario if artisan jobs don’t come to fruition?

The dark scenario is more of the last several decades: an increase in the concentration of wealth in a small very high-up group, then an increase for the modest group of very educated people who served that group, and everyone else battling out in the world economy for jobs that are driven down to the lowest wages or living off things like disability programs and food stamps with persistently high unemployment. I hope we aren’t there.

In your darkest moments, do you worry that you’re simply trying to make up a solution to a problem that might be intractable?

I always worry. An alternative scenario is one where a small group of individuals owns the robots in the capital stock. That’s a worrisome scenario and we certainly see trends in that direction.

COMPETING WITH ROBOTS

Of course, many of the transitions to new eras are quite disruptive, and the last 30 years have been extremely disruptive, and probably the next decade will still have high inequality. But there was a period in the late 19th and early 20th century where people worried about concentration of wealth and talked about how all people over 40 were going to be technologically unemployed right after the Great Depression. But eventually, with proper investments in education and research, development and human capabilities led to the periods we’ve seen of shared prosperity. We’re very far from being there today, and if we only look at the last 30 years, you should be very worried because you need a longer historical perspective to have the more optimistic view.

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